Question:
Why may a NMW lead to Unemployment?
Author: eric_galvaoAnswer:
-Introducing a NMW which is Higher than the Industry's Equilibrium Wage leads to the Wage Rate rising from W to NMW. This means the Demand of Labour Contracts while Supply Increases -Hence an Excess of Labour exists, meaning Unemployment Exists! The Amount of Unemployment depends on the Elasticity of Demand and Supply
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